Takaichi Pushes for Two-Year Food Tax Suspension in 2026

Japanese Prime Minister Sanae Takaichi announced on Sunday her plan to implement a two-year suspension of the 8% consumption tax on food and beverages starting in April 2026, the beginning of fiscal 2026.

Speaking on a TV program, Takaichi explained, “My idea is that the two-year (break on food tax) would bridge the period until a refundable tax credit system is designed and implemented.” The proposal has emerged as a central issue in the upcoming lower house election on February 8.

In her October policy speech to parliament after taking office, Takaichi pledged to address soaring living costs by developing a system combining income tax deductions and cash benefits for low- and middle-income households.

Japan’s consumption tax currently stands at 8% for food and drinks, and 10% for most other goods.

The Centrist Reform Alliance, now the largest opposition party in the House of Representatives, has made abolishing the food consumption tax its flagship campaign promise. Co-leader Yoshihiko Noda, appearing on the same program, estimated it would require about 10 trillion yen in funding.

“I will do my utmost to implement this within the year without issuing deficit-financing bonds,” Noda said, noting that early legislation could enable scrapping the tax as soon as this fall.

Of the seven ruling and opposition party representatives on the program, only Democratic Party for the People leader Yuichiro Tamaki opposed the fiscal 2026 timeline. “We must thoroughly discuss the matter,” he urged, citing impacts on eateries and other businesses. His party advocates cutting the overall consumption tax rate to 5%.